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Dr. Charlie Tian is the founder and CEO of GuruFocus.com, a leading global investment research platform established in 2004. With a Ph.D. in physics, Dr. Tian transitioned from science to finance, applying a data-driven, disciplined approach to value investing.
Capital Southwest has the Financial Strength Rank of 2. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.
Warning Sign:
Capital Southwest Corp displays poor financial strength. Usually, this is caused by too much debt for the company.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
GuruFocus does not calculate Capital Southwest's interest coverage with the available data.
Capital Southwest's debt to revenue ratio for the quarter that ended in Mar. 2026 was 8.66.
Altman Z-Score does not apply to banks and insurance companies.
Capital Southwest (NAS:CSWC) Financial Strength Explanation
The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Capital Southwest has the Financial Strength Rank of 2. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.
Capital Southwest Financial Strength Related Terms
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
Altman Z-Score does not apply to banks and insurance companies.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Capital Southwest (CSWC) has a Financial Strength of 2 as of Mar. 2026. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Capital Southwest and its competitors. This is 50% below median its historical median of 4.00. Over the past decade, Capital Southwest's Financial Strength has ranged from 2.00 to 9.00.
Is Capital Southwest's Financial Strength too high?
Capital Southwest's current Financial Strength of 2 is 50% below median its 10-year median of 4.00. Over the past 10 years, this metric has ranged from a low of 2.00 to a high of 9.00. Overall, Capital Southwest has a GF Score™ of 53/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Capital Southwest's Financial Strength compare to BTT and QQQX?
Capital Southwest's Financial Strength of 2 can be compared against companies in the Asset Management industry. Historically, Capital Southwest's own Financial Strength has ranged from 2.00 to 9.00 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Financial Strength for an Asset Management company?
A good Financial Strength depends on the Asset Management industry context. However, Financial Strength should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Financial Strength mean?
A high Financial Strength can signal that a stock is expensive relative to its fundamentals. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Capital Southwest and its competitors. Capital Southwest's current Financial Strength is 2, which is 50% below median its own 10-year median of 4.00. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Capital Southwest stock overvalued right now?
Based on GuruFocus' analysis, Capital Southwest (CSWC) is currently considered Fairly Valued. The stock's GF Value™ is $26.40, compared to a current price of $24.30 — trading 8% below its estimated fair value. The current Financial Strength is 2, which is 50% below median its 10-year median of 4.00. Capital Southwest's overall GF Score™ is 53/100 with 10 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Financial Strength calculated?
Financial Strength is calculated from a company's financial statements. For Capital Southwest (CSWC), the current Financial Strength is 2 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Capital Southwest (CSWC) Overvalued in 2026?
Based on GuruFocus' analysis, Capital Southwest stock appears to be undervalued.
The current stock price of $24.30 is trading 8% below its estimated GF Value™ of $26.40.
GuruFocus considers Capital Southwest to be Fairly Valued.
Key valuation signals for CSWC:
Financial Strength: 2 (50% below median its 10-year median of 4.00)
GF Value™: $26.40 vs. price of $24.30 (8% below fair value)
No single metric tells the full story. See the CSWC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Capital Southwest Corp is a U.S.-based investment company that specializes in providing customized financing to middle market companies across various industries. The company's investment objective is to produce attractive risk-adjusted returns by generating current income from debt investments and capital appreciation from equity and equity related investments. It focuses on providing flexible financing solutions through partnerships with business owners, management teams, and financial sponsors. The company's portfolio may include senior debt, second lien, and subordinated debt, preferred stocks, common stocks, and warrants. The primary source of revenue comprises interest income and dividend income from investments made as well as management fees.
53GF Score
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